THE BREAKFAST BRIEFING

Next week’s Fed meeting can’t come fast enough.

Market participants have had months to prepare for the Federal Reserve to start dialing back its $85 billion-a-month bond-buying program. But the closer the so-called taper gets, the more jittery markets become.

Stocks dropped again on Thursday, the eighth drop in the past 10 days. Gold and silver slumped, and the yield on the benchmark 10-year Treasury yield jumped to 2.877%, moving closer to the significant 3.0% threshold.

Whether the Fed starts tapering at the Dec. 17-18 meeting, or waits until early next year, the timing uncertainty has prompted stocks to retreat from record highs.

Thursday’s retail-sales data offered more evidence for the Fed to act now.

“The market will put the retail sales down as one more first-tier economic release favoring an early tapering,” said Alan Ruskin, currency strategist at Deutsche Bank.

The retail gains, along with other data showing rising confidence and accelerating job growth, offer hope that American consumers, who account for two-thirds of economic output, could be gaining more solid footing.

But in the good-news-is-bad-news environment taking place on Wall Street, stocks are down as the positive economic news prompts speculation that the Fed will start tapering at this month’s meeting. The Dow has suffered back-to-back triple-digit-point losses, including Thursday’s 104-point drop. The blue-chip average is off 2.2% this month.

Few fear the recent selloff will last long. Some say they would even welcome an even bigger drop to use it as a buying opportunity. Others point to the market’s bullish seasonal patterns at the end of December,which we wrote about in yesterday’s column, that could pull stocks out of their recent funk.

“We could be getting very close to a potential tradeable low and bounce into the new year,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.

No matter what the Fed announces, investors are prepared for the tapering debate to keep dragging in the days ahead.

Dan Greenhaus, chief strategist at BTIG, said he still doesn’t think the Fed will act in December. “Truthfully, we’re not sure we’ve found a client yet who thinks a December reduction will happen,” he wrote to clients Wednesday night.

If the Fed punts to 2014, he says the same debate will keep raging on prior to each future Fed meeting.

“This is no way to run a railroad and we’re all unfortunately paying the price,” he said.

Morning MoneyBeat Daily Factoid: On this day in 2007, the Mitchell Report, an independent investigation of the use of steroids and other performance-enhancing drugs in Major League Baseball, was released. The report implicated seven MVPs and 31 All Stars.

STOCKS TO WATCH

Time Warner is likely to be in the spotlight with Bilbo Baggins and Gandalf returning to the silver screen in “The Hobbit: The Desolation of Smaug.” This film, the second installment of the prequel to “The Lord of the Rings” trilogy, is expected to gross $330 million, according to David Miller, an analyst at B. Riley & Co., making it one of the biggest hits of the 2013. That will help to pay for a lot of champagne at Time Warner’s Warner Bros. Entertainment which is distributing the film.

The stock is up 38% year to date. Miller at B. Riley & Co. rates the stock at neutral with a price target of $68.

Adobe Systems said after Thursday’s closing bell that its fourth-quarter profit fell to 13 cents a share from 44 cents a share a year ago. Excluding items, the maker of Photoshop earned 32 cents a share. However, Creative Cloud subscribers rose by a better-than-expected 402,000 to 1.4 million. Shares of Adobe jumped 6% in extended trading.

Restoration Hardware late Thursday reported adjusted third-quarter profit of 32 cents a share, above the 28 cents a share forecast by analysts. Separately, the company said Co-Chief Executive Officer Carlos Alberini resigned, effective Jan. 31. Mr. Alberini has been named chairman of the board and CEO of Lucky Brand. The company will begin to search for his successor soon. Shares of Restoration Hardware skidded 13% in after-hours trading.

House Passes Budget Agreement in 332-94 Vote: “Lawmakers took a step away from the confrontational politics and brinkmanship that has roiled the economy in recent years, as the House on Thursday passed a budget bill designed to avoid a government shutdown next month and relax spending limits in the next two years.”

Merrill Settles With SEC Over Crisis-Era Bond Deals: “Bank of America’s Merrill Lynch unit agreed to pay $131.8 million to settle SEC allegations over the role of hedge fund Magnetar in the creation of debt securities sold to investors before the financial crisis.”

GM to Sell Entire 7% Stake in Peugeot: “General Motors said it was selling its entire stake in PSA Peugeot Citroën, putting renewed pressure on the troubled French auto maker to secure an investment from a Chinese partner.”

EU, Ukraine Struggle to Revive Accord: “Ukraine and the European Union sought to revive a sweeping trade and political accord Thursday, though no date was set to sign the deal and prospects for an agreement remained shaky.”

MoneyBeat: Peugeot Separating From GM May Have Silver Lining: “PSA Peugeot-Citroën’s investors have taken fright at the precarious state in which the French auto maker finds itself as it searches for a long-term financial and industrial partner to revive its faltering business. But there may be a silver lining, writes Matthew Curtain.”